Julie Purchased Five (5) S&P 500 Index Futures at a Price

question 23

Multiple Choice

Julie purchased five (5) S&P 500 index futures at a price of 1392. The contract size is $250 times the index value. The futures are maturing today at a price of 1387.50. What is the amount of her profit or loss?

• A) -$3,125
• B) -$4,650
• C) -$5,625
• D) -$13,575
• E) -$15,625

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Definitions:

Profitable

Describes a business or activity that generates more revenue than it spends in costs, resulting in a financial gain.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Finished Goods Inventory

The completed products that are ready to be sold but have not been sold yet.

Income

The financial gain earned or received by an individual or entity, often from employment, investments, or business operations.